Law Partners Get Shares Free, page-18

Hi @hewjet, it's Friday and I'm down a few rums so hopefully this post will come out ok

No worries. Scepticism is definitely the correct approach with investment as with most other things (religion, politics, and all that jazz). Obviously as a person who makes negative comments on many companies which you are not invested in you will be "accused" of being a shorter. I don't know if this is the case but I have personally nothing against shorters. As market makers, and depressors on price, they are the friend of the long term investor. Though in this specific instance (roll up) depressed market prices have genuine negative business implications. So there's that.

RE pi being extortion - ambulance chasers. This is to some degree true. The question is from a shareholder's point of view: does this matter? If the client is happy and the business makes money, do we care that some cases are perceived as unethical by those on the other side? No. Provided that our clients believe they are well served. We have no obligation to our opponents. This is capitalism after all. As for the cases that are valid - these people deserve representation. We have an advaserial justice system and while this is not perfect there are advantages to this approach.

RE Shine trading under different names - I agree. This is an issue and Slater did better on this point. That being said there are benefits to retaining the names of acquired firms (in the short term) to both the conquered lawyers and to preexisting clients. However I think that Shine should have a long term plan to re-brand acquired firms. I am concerned that there is little evidence of this.

RE diversification - you are seeing a strength as a negative. One major operational risk with firms like Shine is government regulation. if you have been following the Slater and Gordon saga in the UK you will know exactly why this is. Regulation has the power to massively impact the profitability of law firms. It is an extremely important risk to consider when investing. by diversifying they mitigate the risk as regulation applies only to specific areas of law. So what you are representing here as a weakness is actually a strength. If Shine diversifies then it mitigates regulatory risk. This is a very good thing.
Also to be factored in is that the diversification is through aquisition. So Shine corporate need not be experts in a specific area of law provided that the acquired company is an expert. An example is Shine's purchase of Best Wilson Buckley lawyers - a family law specialist (divorce law). Shine executive does not need to know the details of family law - Best Wilson Buckley does.

RE prominence in class actions - it depends on what the class action is. If we are talking social justice class actions then we have the advantage of Erin Brokovich as a marketing ploy. Though it's true that her star is fading (it's been what, ten years at least since the Julia Roberts movie) her name is still worth something. That said class actions are only a portion of Shine's total business. The bread and butter is PI - other business is diversification.